Wrong place to open.
Should focus on building up the channels distribution first.
Government of Singapore Investment Corporation Pte Ltd (GIC) reduced its long position in Li Ning Company (HKG:2331) from 6.00% to 5.99% on January 12 by selling 162,000 shares at HK$7.124 per share on average on the Stock Exchange, the Stock Exchange's Disclosure of Interests information shows.
Jan 20 (Reuters) - Chinese sportswear brand Li Ning Co Ltd said it planned to issue convertible bonds totalling around 750 million yuan ($115 million) to private equity firm TPG and GIC Investor, with trading in its shares set to resume on Friday.
The bonds will have an interest rate of 4 percent per annum and will be due five years after the issue, convertible at an initial price of HK$7.74 a share, the firm said in an exchange filing late Thursday.
Li Ning's shares were suspended on Wednesday, pending the announcement. Trade will resume at 0100 GMT on Friday, the announcement said.
China’s sportswear leader Li Ning reported a lower-than-expected loss in the first half of the year as the Chinese company was working on inventory clean-up and operation restructures.
The sportswear maker recognized CNY184million ($30.05million) loss in the first six months, compared with CNY44.29million ($7.23million) net income for the same period of last year.
First-half revenue was CNY2.91billion ($47.52million), 24.6 percent down from a year earlier.
The considerable drop was largely due to a reduction in new products distribution, inventory clean-ups and upgrades of online stores.
Li Ning as well as other Chinese brands has been losing out in their home market to foreign sportswear giants like Nike and Adidas in recent years as inventory piles up amid rising rents and declining sales.
The company launched a campaign as it scaled back inventory and shut down stores after posting a loss of 1.98 billion yuan ($32.33 million) in 2012, in contrast to a year-earlier profit of 385.8 million yuan.
Li Ning continued to slim down as it closed 410 stores in the first half, compared with more than 900 stores in the same period a year ago. The number of stores is 6,024 by June 30th.
Average inventory turnover has reduced from 9 months to 7 months as the company signed “channel revival” agreements with over 90 percent distributors.
The company expected investments made in the last one and half years will be paid back and cash flows improved in the second half but warned uncertainties in China’s changing sportswear industry and economic slowdown.
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